News / Asia

    China Hits Back at EU Wine Over Solar Panel Duties

    Participants taste Italian Chianti Classico wine at a food expo in Guangzhou, Guangdong province, June 4, 2013.
    Participants taste Italian Chianti Classico wine at a food expo in Guangzhou, Guangdong province, June 4, 2013.
    Reuters
    China took aim on Wednesday at exports of the European wines favored by its growing middle class, responding to an EU move to impose anti-dumping duties of Chinese solar panels as tensions rise between two of the world's biggest trade partners.

    In a step targeting southern European states such as France and Italy that back duties but largely sparing northern countries such as Germany that oppose them, Beijing launched an anti-dumping and anti-subsidy inquiry into sales of European wine.

    The European Union will impose duties on imports of Chinese solar panels from Thursday, but has dramatically reduced the initial rate after pressure from some large member states led by Berlin in the hope of negotiating a settlement with Beijing.

    China's Commerce Ministry said the EU penalties were imposed despite Beijing making great efforts and showing enormous sincerity in trying to resolve the matter through talks.

    “The European side still obstinately imposed unfair duties on Chinese imports of solar panels,” the ministry said in a statement on its website (www.mofcom.gov.cn).

    China's newly well-to-do, whose ranks are growing as fast as the economy, have a seemingly unquenchable thirst for European wines, especially those from France which make up more than half the total. China is now the biggest importer of Bordeaux wines where consumption soared 110 percent in 2011 alone.

    France's trade ministry condemned the Chinese move as “inappropriate and reprehensible”, accusing Beijing of opening a new front in an unrelated area. French President Francois Hollande called for a meeting of the 27 EU member states to show solidarity on trade issues, a government spokeswoman said.

    In a more cautious reaction, German Economics Minister Philipp Roesler renewed Berlin's call for a negotiated solution and warned of the danger of wider trade confrontation.

    Any action is unlikely to be popular with Chinese consumers. “We Chinese love the French wines. They're so sophisticated and go down so well,” said Niu Lanxiang, 23, a logistics worker out shopping for wine in a supermarket in Beijing's fashionable Sanlitun district.

    “I know wine is more of a Western habit, but China is a modern country now too and we're learning how to enjoy wine,” she said. However, not all Chinese share her cultured palate; some still prefer to drink wine mixed with Coca-Cola or Sprite.

    A European Commission spokesman told a briefing there was no dumping or subsidy of European wine exports to China and the EU authorities would defend their producers. He declined comment on talk of a trade war, saying Brussels did not use such terms.

    The Chinese ministry said the government had begun the inquiry into EU wines at the request of Chinese wine makers.

    “The Commerce Ministry has already received an application from the domestic wine industry, which accuses wines imported from Europe of entering China's market by use of unfair trade tactics such as dumping and subsidies,” it said in a statement.

    “We have noted the quick rise in wine imports from the EU in recent years, and we will handle the investigation in accordance with the law.”

    The move appeared largely symbolic and less severe than if China had targeted industrial exports such as Airbus aircraft, made by Toulouse-based European aerospace group EADS.

    “It's a very calculated move. Wine is significant enough as a signal, yet it's not important enough to hurt industries in the European Union,” said Xu Bin, professor of economics and finance at the China Europe International Business School in Shanghai.

    China's “underlying interests” were very much in favor of resolving the solar panel issue within the next two months without over-reacting, he said. “Neither side wants to see a trade war, but both sides have their own interests.”

    France hit hardest

    EU wine exports to China excluding Hong Kong, which EU officials said was not covered by the announcement, reached 257.3 million liters in 2012 for a value of nearly $1 billion. More than half - 139.5 million liters - came from France.

    Diageo and Pernod are among the suppliers.

    European wine-growers receive subsidies from the EU's Common Agricultural Policy, although not specifically for exports. For example, the biggest producer of Beaujolais wines, George Duboeuf, received 1.1 million euros ($1.4 million) in EU handouts in the 2011/12 season, according to the French Agriculture Ministry.

    China is the third biggest export market for European wines and the fastest growing, as the rising middle class enjoys the pleasures and status of sipping fine Bordeaux or quaffing Rioja.

    About 15 Chinese individuals or businesses have bought wine-growing properties in Bordeaux and investors also want to develop luxury tourism in the region, which they think will be the next fad as Chinese wealth pours into Europe.

    Jim Boyce, who runs the wine blog grapewallofchina.com, said Chinese manufacturers have been upset about alleged dumping for a while. “The big issue was all this Spanish wine flowing in here at incredibly low prices,” he said.

    In Madrid, a representative of the Spanish Wine Federation said the Chinese move was a potentially serious blow to one of the few bright spots in a country stuck in deep recession since a housing bubble burst in 2008, decimating its economy.

    “The saddest thing about all this is that if proceedings are opened and anti-dumping measures such as import tariffs applied, it means a sector that is doing really well will be dragged into a trade war that has nothing to do with it,” she said.

    Spain abstained on the solar panel duties. Under EU rules that is counted as a vote in favor.

    The EU is China's most important trading partner, while for the EU, China is second only to the United States. Chinese exports of goods to the bloc totaled 290 billion euros ($376 billion) last year, with 144 billion euros going the other way.

    Wine sales are only a fraction of overall exports to the rising Asian economic powerhouse but the move raises the risk of more tit-for-tat trade barriers.

    The EU now has 31 trade investigations underway, 18 of them involving China. The largest to date is that into 21 billion euros of imports from China of solar panels, cells and wafers.

    The EU says it has evidence that Chinese firms are selling solar panels below cost - a practice known as dumping. But the initial duty of 11.8 percent announced on Tuesday by European Trade Commissioner Karel De Gucht was far below the average 47 percent that had been planned.

    The Chinese Commerce Ministry said it took note of the lower initial rate and called on the EU to “show more sincerity and flexibility to find a resolution both sides can accept through consultations.”

    You May Like

    Double Wave of Suicide Bombings Puts Lebanon, Refugees on Edge

    Following suicide bombings in Christian town of Al-Qaa, on Lebanon's northeast border with Syria, fears of further bombings have risen

    China Seeks On-Off Switch for Internet

    Public asks whose security is cybersecurity law aiming to protect

    UN Human Rights Chief: Burundi May Explode Into Ethnic Violence

    Burundian government accuses the UN of a campaign of distortion

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Baghdad Bikers Defy War with a Roari
    X
    June 28, 2016 10:33 AM
    Baghdad is a city of contradictions. War is a constant. Explosions and kidnappings are part of daily life. But the Iraqi capital remains a thriving city, even if a little beat up. VOA's Sharon Behn reports on how some in Baghdad are defying the stereotype of a nation at war by pursuing a lifestyle known for its iconic symbols of rebellion: motorbikes, leather jackets and roaring engines.
    Video

    Video Baghdad Bikers Defy War with a Roar

    Baghdad is a city of contradictions. War is a constant. Explosions and kidnappings are part of daily life. But the Iraqi capital remains a thriving city, even if a little beat up. VOA's Sharon Behn reports on how some in Baghdad are defying the stereotype of a nation at war by pursuing a lifestyle known for its iconic symbols of rebellion: motorbikes, leather jackets and roaring engines.
    Video

    Video Melting Pot of Immigrants Working to Restore US Capitol Dome

    The American Iron Works company is one of the firms working to renovate the iconic U.S. Capitol Dome. The company employs immigrants of many different cultural and national backgrounds. VOA’s Arman Tarjimanyan has more.
    Video

    Video Testing Bamboo as Building Material

    For thousands of years various species of bamboo - one of the world's most versatile plants - have been used for diverse purposes ranging from food and medicine to textiles and construction. But its use on a large scale is hampered because it's not manufactured to specific standards but grown in the ground. A University of Pittsburgh professor is on track to changing that. VOA’s George Putic reports.
    Video

    Video Orphanage in Iraqi City Houses Kids Who Lost their Parents to Attacks by IS

    An orphanage in Iraqi Kurdistan has become home to scores of Yazidi children who lost their parents after Islamic State militants took over Sinjar in Iraq’s Nineveh Province in 2014. Iraqi Kurdish forces backed by the U.S. airstrikes have since recaptured Sinjar but the need for the care provided by the orphanage continues. VOA’s Kawa Omar filed this report narrated by Rob Raffaele.
    Video

    Video Re-Opening Old Wounds in a Bullet-Riddled Cultural Landmark

    A cultural landmark before Lebanon’s civil war transformed it into a nest of snipers, Beirut’s ‘Yellow House’ is once again set to play a crucial role in the city.  Built in a neo-Ottoman style in the 1920s, in September it is set to be re-opened as a ‘memory museum’ - its bullet-riddled walls and bunkered positions overlooking the city’s notorious ‘Green Line’ maintained for posterity. John Owens reports from Beirut.
    Video

    Video Brexit Resounds in US Presidential Contest

    Britain’s decision to leave the European Union is resounding in America’s presidential race. As VOA’s Michael Bowman reports, Republican presumptive nominee Donald Trump sees Britain’s move as an affirmation of his campaign’s core messages, while Democrat Hillary Clinton sees the episode as further evidence that Trump is unfit to be president.
    Video

    Video New York Pride March A Celebration of Life, Mourning of Loss

    At this year’s march in New York marking the end of pride week, a record-breaking crowd of LGBT activists and allies marched down Manhattan's Fifth Avenue, in what will be long remembered as a powerful display of solidarity and remembrance for the 49 victims killed two weeks ago in an Orlando gay nightclub.
    Video

    Video NASA Juno Spacecraft, Nearing Jupiter, to Shed Light on Gas Giant

    After a five-year journey, the spacecraft Juno is nearing its destination, the giant planet Jupiter, where it will enter orbit and start sending data back July 4th. As Mike O'Sullivan reports from Pasadena, California, the craft will pierce the veil of Jupiter's dense cloud cover to reveal its mysteries.
    Video

    Video Orlando Shooting Changes Debate on Gun Control

    It’s been nearly two weeks since the largest mass shooting ever in the United States. Despite public calls for tighter gun control laws, Congress is at an impasse. Democratic lawmakers resorted to a 1960s civil rights tactic to portray their frustration. VOA’s Carolyn Presutti explains how the Orlando, Florida shooting is changing the debate.
    Video

    Video Tunisian Fishing Town Searches for Jobs, Local Development Solutions

    As the European Union tries to come to grips with its migrant crisis, some newcomers are leaving voluntarily. But those returning to their home countries face an uncertain future.  Five years after Tunisia's revolution, the tiny North African country is struggling with unrest, soaring unemployment and plummeting growth. From the southern Tunisian fishing town of Zarzis, Lisa Bryant takes a look for VOA at a search for local solutions.
    Video

    Video 'American Troops' in Russia Despite Tensions

    Historic battle re-enactment is a niche hobby with a fair number of adherents in Russia where past military victories are played-up by the Kremlin as a show of national strength. But, one group of World War II re-enactors in Moscow has the rare distinction of choosing to play western ally troops. VOA's Daniel Schearf explains.
    Video

    Video Muslim American Mayor Calls for Tolerance

    Syrian-born Mohamed Khairullah describes himself as "an American mayor who happens to be Muslim." As the three-term mayor of Prospect Park, New Jersey, he believes his town of 6,000 is an example of how ethnicity and religious beliefs should not determine a community's leadership. Ramon Taylor has this report from Prospect Park.

    Special Report

    Adrift The Invisible African Diaspora